Investing in Sugar as a Commodity

Although sugar production began more than 9,000 years ago in southeastern Asia, today, Latin American countries dominate the sugar trade. Brazil is the largest sugar producer in the world, as you can see in the following table.

Top Sugar Producers

Country

Production (Thousands of Tons)

Brazil

33,591

India

27,174

China

11,630

United States

7,661

Thailand

7,011

Mexico

5,543

Source: United States Department of Agriculture, 2005 figures

If you’re interested in investing in sugar, head over to the New York Board of Trade (NYBOT), which offers two futures contracts that track the price of sugar: Sugar #11 (world production) and Sugar #14 (U.S. production). Here are the contract specs for these two sugar contracts:

Sugar #11 (World)

Sugar #14 (U.S. production)

Ticker symbol

SB

SE

Contract size

112,000 pounds

112,000 pounds

Underlying commodity

Global sugar

Domestic (U.S.) sugar

Price fluctuation

$0.01/pound

$0.01/pound

($11.20 per contract)

($11.20 per contract)

Trading months

March, May, July, October

January, March, May, July, September, November

Historically, Sugar #14 tends to be more expensive than Sugar #11. However, Sugar #11 accounts for most of the volume in the NYBOT sugar market.

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